Selling a property can be an exciting and stressful experience. It’s exciting because it’s a big step and has the potential to earn you money, but it’s also stressful because there are many unknown factors, and there’s probably a lot of pressure for you to sell quickly. While many real estate agents may be willing to offer their top tips and tricks, you might want to get a pre-listing inspection to help you prioritize repairs.
Understanding what this inspection entails — and its pros and cons — will help you make the best decision for your situation.
What Is a Pre-Listing Inspection?
A pre-listing inspection is similar to a standard home inspection, but the seller pays for its completion before listing their home on the market. By doing this, they can begin repairs earlier and list their property based on fair market value. You don’t need to complete this step to sell your home, but many real estate agents recommend the process. Even if you’ve lived in a house for years, you may be unaware of issues hiding behind the walls.
What Are the Advantages of a Pre-Listing Inspection?
For most homeowners, the advantages of a pre-listing inspection far outweigh the disadvantages. However, you’ll want to take a closer look at your situation to determine what makes the most sense.
Here’s a look at the top five benefits you can expect to see should you decide to take this step.
1. Understand Your Property’s Value
Without an inspection, pricing your home is a bit of a gamble. You can look at comparables for the area, but ultimately your property’s condition is probably a bit of a mystery. It’s quite common for mold, insect infestations and outdated electric wiring to exist without the owner knowing. While the house may seem fine, the buyer’s home inspection would likely reveal these issues. Should this occur, they’d probably want to renegotiate or drop out of the contract entirely.
By completing a pre-listing inspection, you know your house’s condition before you put it on the market and choose a selling price. This knowledge will allow you to remain competitive and won’t encourage you to accept unreasonably low offers. In essence, this information will give you a head start in the selling process and will offer you additional negotiating power.
2. Obtain More Negotiating Power
Having negotiating power means you’re at an advantage when it comes to setting the selling price. Since you know the legitimate condition of your home, you won’t need to entertain lowball offers. You’ll be able to anticipate necessary repairs and bring your house up-to-code before putting it on the market. Your property will stand out because buyers will enjoy complete transparency regarding the house’s condition and know you’re serious about selling.
3. Begin Repairs Early
When you follow a traditional selling timeline, you clean and repair what you believe is necessary, and then interested parties view the property. With any luck, you’ll eventually get an offer on the house, and should you choose to accept, the buyer will schedule a home inspection. Many people choose to do this on contingency so they can back out of the agreement or renegotiate the selling price. Only after the review is complete will you learn exactly what needs to be done to sell.
If you choose to pay for a pre-listing inspection, you can skip the wait and begin making repairs upon getting the results. This will give you time to shop for the best construction workers and materials, so you save time and money. Even after the renovations are complete, you should stay in touch with your contractor since you may need their services again before the house sells. Hopefully, the required repairs will be minor, and you’ll have a smooth transition to market.
4. Enjoy Less Stress
Wondering if you’ve priced your house fairly can be a stressful time. Instead of questioning your situation, you can get an inspection and reap the benefits while minimizing your stress. As you likely know, the truth is usually better than what you’ve imagined. After renovating the significant issues on your property, you’ll feel confident about getting professional-grade photos taken to include with the listing. After all, you won’t feel the need to hide any of your previous concern areas.
5. Sell Your Property Faster
People say time is money, and that’s especially true when it comes to selling a house. Every day you wait for offers means more time paying for utility bills and keeping your money tied up. Having a pre-listing inspection helps you attract serious buyers. You’ll spend less time negotiating and get offers that are closer to the list price. Ultimately, completing this step will increase your buyer’s confidence and keep things moving smoothly.
What Are the Disadvantages of a Pre-Listing Inspection?
Despite the numerous advantages, there are several disadvantages as well. You’ll need to evaluate whether the inspection is still worth your time and money after reviewing these factors.
1. You’re Responsible for the Cost
Typically, the buyer would cover the cost of a traditional home inspection. When you decide to take this step before listing, you’re responsible for the price. An average inspection costs roughly $300-$500 based on the property’s size and location. The type of assessment will also impact the overall cost — if you want specialized services, you’ll need to pay an additional sum. These expenses can eat away at your renovation budget and may only bring new problems to light.
2. You’ll Need to Reveal Any Defects Discovered
Legally you must reveal any known defects or problems relating to your property when you list the house on the market. When you complete the inspection, you may uncover more problems than you originally anticipated. If the issues are severe, it may scare away some potential buyers.
Alternatively, you may already feel confident in your existing knowledge. If you live in a newly built house or have just finished gutting the property, it’s much easier to estimate the value. In that case, a pre-listing inspection may be a repeat of what you already know.
3. You May Waste Time and Money
Some buyers are happy to buy a property without the homeowner completing repairs. Having flexibility in the asking price allows buyers to choose upgrades that are to their liking. When you begin making repairs based on the pre-listing inspection, you may find yourself updating things the buyers don’t care about. If these renovations don’t offer a high return on investment (ROI), you may be making a poor financial decision.
4. You’ll Likely Have to Wait for the Buyer’s Inspection
Buyers may request a regular inspection as a contingency for their purchase, regardless of your prior results or upgrades. In that case, you’ll still need to wait for their inspector to come out and relay their findings. By then, the time you saved from your inspection may be negligible compared to if you had simply waited.
Weighing the Pros and Cons
After reviewing both sides of the situation, you’ll need to decide if a pre-listing inspection makes sense for you. You should consider the property’s general condition and whether you intend to complete repairs or sell the property in its existing state. If it’s a fixer-upper that requires extensive renovations, you’re probably better off skipping the inspection and listing your home low enough that future buyers can complete the work themselves.
Alternatively, if you’re in a rush to sell and you believe your house is in good condition, the inspection could speed the process and entice more buyers. Only you can make the decision, but if you’re struggling, consider speaking to your real estate agent for advice relating directly to your property.